Prepaid cards offer new route to Net

Prepaid calling cards, which have changed the way people make long-distance calls, especially to foreign lands, are migrating onto the Internet in the form of upfront payments to access the Web.

Sprint has launched a new generation of prepaid Internet cards that will be as widely sold at retail stores across the country as the phone cards are. AT&T has also launched a family of prepaid Internet products sold through retail stores.

The prepaid service comes with a disc that can be loaded into a computer to program it to go online.

Customers can buy 20 hours on the Internet for $20 when they dial up through a local phone number. The time burns faster if the customer connects through an 800 number.

Once purchased, the hours are good for one year.

Prepaid Internet is designed to appeal to people who carry laptops as they travel and wish to connect from anywhere, said Kelly Carnago, a Sprint marketing executive. It also is good for people who seldom use the Internet and don't want to pay a large monthly fee.

The prepaid Internet option comes at a time when free Internet service providers are closing.

A recent study by Telecommunications Reports International found that the number of U.S. households subscribing to online services declined by nearly 4 percent during the third quarter of 2001.

Most of that decline was among those taking free Internet service. The survey found 4.8 million subscribers to free service in the third quarter, a decline of about 50 percent.

Another study, made by Cahners In-Stat Group, estimates the prepaid Internet market for 2001 hit $10 million and predicts it will grow to $280 million in 2005.

The author of the Cahners' study, Henry Goldberg, said the potential market is surprisingly broad.

"Prepaid Internet service providers are targeting travelers, consumers without credit, infrequent to moderate users of Internet services, parents controlling the time their children spend online and people with privacy concerns," Goldberg said.

Internet service won't be the last facet of the telecommunications business to feel the effects of prepaid service, said Jeffrey Kagan, an Atlanta-based telecom analyst.

"This is all part of the commoditization of the communications business," Kagan said. "You can trace its start back to the early '90s when long-distance companies introduced services like 1-800-COLLECT. When prepaid cards for long-distance arrived here from Europe, they were slow to catch on, but the concept has swept on to include cell phones, pagers and now the Internet."

Kagan said that people who want to use the Internet without identifying themselves may flock to the prepaid services along with others who don't have regular phones at home.

"We live in a disposable world," he said. "You have throwaway cameras, throwaway cell phones and now, throwaway Internet."